SINGAPORE/JAKARTA, Oct 23 OUE, a
property firm controlled by Indonesia's Lippo Group, has hired
Credit Suisse as an adviser and is trying to raise
billions in loans to challenge a $7.2 billion bid for Singapore
conglomerate Fraser and Neave, sources said.

The move by Overseas Union Enterprises (OUE) is likely to
force a group linked to Charoen Sirivadhanabhakdi, Thailand's
third-richest man, to extend an Oct. 29 deadline for its F&N bid
and consider raising its buyout offer of S$8.88 per share.

The fight for F&N's businesses has shifted to the group's
property portfolio, worth more than S$8 billion ($6.56 billion),
after F&N agreed last month to sell its nearly 40 percent stake
in Tiger beer maker Asia Pacific Breweries Ltd to
Heineken NV.

"OUE will have to raise more than the Thais," said a source
with direct knowledge of the matter. "Given the expected size of
this (deal), there will be a number of banks involved."

An OUE spokeswoman declined to comment. A Hong Kong-based
spokesman for Credit Suisse also declined to comment.

The Thai group had lined up loans of S$11.8 billion ($9.66
billion) to bid for F&N, Reuters Basis Point reported, initially
raising funds to buy a 22 percent stake and raising more from
bridge loans to bid for the entire firm.

OUE is trying to win support from Japan's Kirin Holdings
, which owns 14.9 percent of F&N, and other parties for
its bid for F&N, sources previously told Reuters.

"OUE doesn't have so much power to take over the whole of
FNN, looking at their balance sheet currently," Ng Kian Teck,
lead analyst at SIAS Research. "They could buy over a part of
F&N, or partner with another party who would be keen on the
beverages business."

OUE's move comes less than two weeks after F&N's board
rebuffed its S$1.4 billion offer for the group's hospitality and
serviced apartments business

A STRETCH FOR OUE FINANCES

A full bid for F&N, which has a market capitalisation of
about $11 billion, would stretch OUE's finances.

OUE has a market capitalisation of just $2.3 billion and had
a debt-to-equity ratio of 0.70 at the end of 2011, compared with
the Singapore industry average of 0.32, according to Thomson
Reuters data.

However, OUE's controlling shareholder, Lippo Group, has
about $11 billion in assets and operates private and public
companies in China, Indonesia, the Philippines, Singapore and
South Korea.

OUE interest is limited to F&N's estimated S$8.7 billion
property portfolio. Partnering with Kirin could allow it to sell
the beverage business to the Japanese company.

A person with direct knowledge of the matter told Reuters
that Kirin is only interested in the food and soft drinks
business of F&N, the value of which is mainly locked up in its
Malaysian-listed entity.

Coca-Cola is also interested in F&N's soft drinks
unit, which sells the popular soft-drink 100PLUS, fruit juices,
and mineral water in the event they are hived off from the
Singapore group's property assets.

OUE is exploring the sale of a hotel cum retail complex in
the prime Orchard Road shopping belt in downtown Singapore for
about S$1.7 billion ($1.4 billion), a newspaper reported last
month.

Standard Chartered said in a research note that OUE could
become Singapore's largest-listed landlord and residential
developer.

"We expect the successful control of F&N by OUE and partners
to result in a break-up of F&N's property, beverages and
publishing businesses," Standard Chartered analysts said in the
note.

Morgan Stanley is advising the Thai group, while
Deutsche Bank is advising Kirin.

Next In Bonds News

Dec 9 The Dallas Police and Fire Pension
System's board has halted withdrawals from a deferred retirement
plan following a lawsuit by the city's mayor, who claimed
withdrawals were accelerating the $2.7 billion pension system's
descent into insolvency.

Dec 9 A former Cantor Fitzgerald trader has been
indicted on charges that he defrauded investors by lying about
the price of mortgage bond transactions he handled for them
after the financial crisis, U.S. prosecutors said on Friday.

Reuters is the news and media division of Thomson Reuters. Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Learn more about Thomson Reuters products: